_{Out of the fire (£8.9m), into the frying pan (SRA probe).}

The law firm allegedly ripped off after a dodgy accountant took control of its client account has recovered the missing £8.9m from its insurer, RollOnFriday understands.

Essex firm Pellys was one of many organisations and individuals who used Croucher Needham as their accountants.  

According to multiple sources including the family of a creditor who lost hundreds of thousands of pounds to the alleged scam, Croucher Needham director Simon Needham promised his clients that he could get them a better return on their money than the banks.

He allegedly told them that if they wanted their money back they could email his wife and their funds would be returned within 48 hours.

A relative of a victim told ROF that Needham forged detailed bank statements purporting to show multiple transfers in and out of clients' accounts to convince them that their money was safe.

When Needham died in front of a train last summer, his trusting clients discovered their money was gone. Croucher Needham was liquidated owing 51 impacted clients and HMRC a total of £26,789,733.

Referred to anonymously as ‘Creditor 1’ in the liquidator’s statement of affairs, the largest victim of the alleged fraud with a loss of £8.9m is understood to be Pellys.

However, according to multiple sources the law firm has managed to compel its professional indemnity insurer to stump up the full sum, meaning its clients will not be left a penny out of pocket.

The PI insurer was unable to void the firm's policy as Pellys was an honest victim of fraud, according to sources. 

While the PI insurer has saved the SRA from having to call on the Solicitors Compensation Fund, whose pockets are likely to be emptied courtesy of the Axiom fraud, Pellys is still subject to an ongoing investigation by the regulator.

ROF understands that the SRA probe is focused on potential non-compliance with the SRA Accounts Rules, which prohibit firms from using their client account to provide banking facilities and which ordain that transactions must only be made in respect of the delivery of a firm's regulated services.

The fraud has not only impacted Croucher Needham's clients. Needham was a prominent figure in the local sporting community and appears to have been singlehandedly funding Enfield Football Club, a lower league side.

According to a fan of local rival team Walthamstow, his largesse was legendary and inexplicable. “The money he was (reportedly) putting into Enfield was staggering. They signed most of Walthamstow's 2019-20 team overnight before the 2020-21 season, doubling, and in some case tripling, their wages", said the fan on a football chat forum.

“They were giving away kits, scarves, programmes, burgers and just about anything else you can think of at most of their home games, as well as making it free entry a lot of the time", said the fan.

Following the death of its director, Enfield FC posted a statement on its website mourning his passing. However, that was soon replaced with a rather less hagiographical update which revealed that “This time last week we all thought we had it all… the reality is we had nothing”.

“Our impression was that the club owned a number of vehicles and assets … we have since found out this was not the case as everything was leased… All vehicles are currently being returned with immediate effect”, it said, before that post vanished as well.

The players are also understood to have walked. The club website now appears to be largely defunct and an emailed request for comment from ROF was automatically bounced back.

Croucher Needham is currently the subject of a major fraud investigation involving multiple agencies, Essex Police confirmed.

Pellys did not respond to several requests for comment. A spokesperson for Croucher Needham liquidators FRP Advisory declined to comment on the basis the investigation remains ongoing. 

     Let the top firms come to you on LawyerUp when they like you for a role. It's available on the App Store and Google Play.